In light of the escalating violence and the further militarisation of the conflict in Syria, the European Union (EU) further reinforced its economic sanctions against Syria. The amended EU sanctions came into force yesterday, July 24, 2012.
By way of Council Decision 2012/420/CFSP, the enforcement of the EU's existing arms embargo against Syria was further strengthened.1 In addition, Council Implementing Regulation 673/2012 and Council Implementing Decision 2012/424/CFSP, respectively, added further Syrian individuals and entities to the EU asset freezes and travel bans.2
I. Overview of Amended EU Sanctions Against Syria
As of July 24, 2012, EU Member States are obliged to inspect vessels and aircraft heading to Syria if they suspect that the cargo contains arms or equipment for internal repression that are covered by the arms embargo against Syria. Prior to that date, inspections in connection with the Syrian arms embargo that came into force in March 2011 were left to the Member State's discretion. This new inspection obligation applies in all 27 Member States' seaports and airports as well as in their territorial sea, in accordance with their national legislation and with international law, in particular the law of the sea and relevant international civil aviation agreements and maritime transport agreements. Items that may not be exported to Syria under EU law must be seized and disposed. In addition, aircraft and vessels heading to Syria will have to provide to the authorities additional pre-arrival and pre-departure information on their cargo.
With respect to asset freezes, the EU targeted three additional entities and 26 additional individuals. Targeted individuals include in particular senior members of the Syrian army and the intelligence and security services directly involved in the repression of the civilian population led by the country's president, Bashar al-Assad. The three additional entities - Drex Technologies S.A., Cotton Marketing Organisation, and, most notably, Syria Arab Airlines (Syria's national carrier) - were targeted on the ground that they provide financial support to the Syrian regime. The amendment brings the total number of individuals subject to asset freezes up to 155 and the total number of entities up to 52. The individuals are also prohibited from entering into or transiting through the EU.
In addition, the EU approved an exemption to the existing EU asset freeze by permitting Member States to authorize payments by or through banks subject to EU sanctions if the transfers constitute financial support to non-sanctioned Syrian nationals pursuing an education, professional training or engaged in research in the EU. However, such exemption only applies if the payment is not directly or indirectly received by a sanctioned individual.
These new measures represent a (further) reaction to the escalating violence in Syria. They also come in light of the inability of the United Nations Security Council to adopt tougher sanctions due to vetoes by Russia and China.
The stricter inspection and seizure rights follow the interception of two Russian vessels this year. In January, the Russian ship Chariot was temporarily halted in Cyprus during refuelling as it carried ammunition to Syria. In June, the MV Alaed was forced by UK authorities to return to Russia when approaching a UK port for re-fuelling. The MV Alaed was said to transport Mi-25 helicopter gunships to Syria. While contemplating a military seizure of the ship, to avoid a confrontation with Russia, the UK decided to ensure that the MV Alaed's insurance cover was withdrawn by informing the ship's UK-based insurer that continuing to insure the shipment would be a breach of the EU arms embargo against Syria. Moving forward, the new sanctions regime sets a clear framework for inspection and seizure if a vessel or aircraft refuels at a seaport or airport and/or crosses the Member State's territorial sea.3
Notably, the duty to inspect vessels and aircraft extends to cargo suspected to contain certain proscribed dual-use items (i.e., items that might be used by the Syrian government for internal repression). Uncertainty remains as to whether approval of the country under whose flag the ship is sailing must be obtained for inspections that occur outside the Member States' seaports. To that end, the Council Decision 2012/420/CFSP provides that consent of the country under whose flag the ship is sailing should be obtained "as necessary in accordance with international law"4 Such a consent prerequisite may limit the effectiveness of the inspection rights,5 however, it may be required due to the right of "innocent passage" provided by the United Nations Convention on the Law of the Sea.6 While Russian diplomats have argued that the right of "innocent passage" may require a Member State to obtain permission from the country under whose flag the ship is sailing in order to search a vessel that is in such Member State's territorial waters (but not in its seaports),7 Member States may argue that such passage would not be "innocent" as it would be "prejudicial to the peace, good order or security of the coastal State".8
The new rules constitute the 17th round of EU sanctions against Syria since the violence began in March 2011. EU sanctions against Syria include in particular:
- Arms: (i) an arms embargo (including certain dual-use goods that might be used for internal repression);
- Telecoms: (ii) an embargo on telecommunications monitoring and interception equipment and ban on provision of certain services related to such equipment;
- Oil and gas: (iii) import ban on crude oil and petroleum products, (iv) embargo on key equipment and technology for the oil and natural gas industries, (v) a ban on provision of certain services related to crude oil and petroleum products or the oil and natural gas industries, (vi) a ban on certain investment in the oil and natural gas industries and the construction of power plants for electricity production;
- Financial services: (vii) prohibition for the European Investment Bank to make certain payments, (viii) restrictions on issuance of and trade in certain bonds, (ix) restrictions on establishment of branches and subsidiaries of, and cooperation with, Syrian banks, (x) restrictions on provision of insurance and re-insurance;
- Luxury goods: (xi) ban on exports of luxury goods, including caviar, truffles, and cigars with a sales price exceeding EUR 10 per item; wines and spirits with a sales price exceeding EUR 50 per litre; leather goods (sales price above EUR 200), garments and shoes (items above EUR 600), jewellery, gems and pearls; tableware, clocks and watches (above EUR 500), lead crystal glassware (above EUR 200); luxury vehicles, planes and boats. New vehicles from EUR 25,000; and
- Other: (xii) ban on trade in gold, precious metals and diamonds with the Government of Syria, (xiii) visa bans against individuals; (xiv) asset freezes against entities and individuals.
Companies should carefully scrutinize their operations, business relations or any potential exposure, and should take action immediately in order to ensure compliance with the EU sanctions regime against Syria. In this context, the expansion of the Syrian arms embargo to include also certain dual-use items (as listed in Annex 1a of Regulation 36/2012) significantly expands the scope of vessels and aircrafts potentially subject to inspections by the EU. Companies particularly affected by the new regime include maritime and airline companies as well as insurers providing insurance cover for vessels and aircrafts. Moreover, any company conducting business in the EU must ensure that it does not engage in activities with EU sanctioned Syrian individuals.
1 See Council Decision 2012/420/CFSP of 23 July 2012 amending Decision 2011/782/CFSP concerning restrictive measures against Syria, available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:196:0059:0060:EN:PDF . See also the relevant EU's press release, available at http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/EN/foraff/131963.pdf and the Council conclusions on Syria, available at http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/EN/foraff/131962.pdf.
2 See Council Implementing Regulation 673 of 23 July 2012, 2012 OJ EU L196 2012, p.8, available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:196:0008:0011:EN:PDF . See also Council Implementing Decision 2012/424/CFSP of 23 July 2012, 2012 OJ EU L196, page 81, available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:196:0081:0084:EN:PDF .
3 Similar rules were adopted in 2010 by the EU for shipments to and from Iran, Eritrea, North Korea and Somalia.
4 Article 1(1) Council Decision 2012/420/CFSP.
5 Anecdotally, the MV Alaed has been re-flagged to sail under the Russian flag to prevent future interception and seizure of the cargo and is making a second attempt, see press article of June 24, 2012, The Telegraph, Russian arms ship to make second attempt to deliver helicopters to Syria, available at http://www.telegraph.co.uk/news/worldnews/middleeast/syria/9352852/Russian-arms-ship-to-make-second-attempt-to-deliver-helicopters-to-Syria.html.
6 United Nations Convention on the Law of the Sea, Articles 17 et seq, available at http://www.un.org/Depts/los/convention_ agreements/texts/unclos/unclos_e.pdf.
7 See article The Voice of Russia, Russia finds new EU sanctions against Syria unfair, available at http://english.ruvr.ru/2012_07_24/Russia-finds-new-EU-sanctions-against-Syria-unfair/
8 Article 19(1) of UN Convention on the Law of the Sea.
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